11 Compelling Reasons to Try Outsourcing to Ukraine
Outsourcing to Ukraine is a popular approach that allows business owners to delegate software development or any other technical functions to companies based in Ukraine. These days, almost every type of business has an IT infrastructure and needs either software development, maintenance, or support of their digital product.
Instead of hiring an IT department locally, companies build remote dedicated teams or fully delegate these functions by outsourcing them to Ukraine. This way, tech companies can scale their products faster and optimize development costs without compromising the quality of their products.
1. Open Access to Top Tech Talents for Reasonable Cost
Top Tech Talens Inaccessible on the Local Market
Talent shortage is a common characteristic of the technologically advanced countries. More and more companies struggle to compete with big tech companies which have grown into more lucrative places of employment. So the small and middle businesses advance their surge for talents to outsourcing destinations such as Ukraine.
Offline businesses are trying to access a larger market share by digitizing their operations. However, via hiring software development specialists locally, they’re joining the competition on the tech talent market and, consequently, increase the talent gap.
Optimize Development Costs
Programmers operating highly demanded tech skills can potentially get inflated salaries, which results in an increased overall development cost. Hiring programmers in popular outsourcing destinations with larger talent pools such as Ukraine is a great opportunity for foreign business owners as they can decrease development costs without compromising quality.
2. Outsourcing Market in Ukraine Is Growing Extremely Fast
Second only to Poland, Ukraine has the biggest tech talent pool in the Eastern European region. Accompanied by the booming tech ecosystem and strong education background, the Ukrainian employment market gains 35K entry-level tech specialists each year.
High quality of education positively influences both the number and quality of local talents. In fact, Ukrainian tech talents are recognized as 5th best software engineers worldwide.
Thanks to the solid technical expertise, good command of English, and interest in the emerging disciplines such as blockchain, AI, big data, etc.,
Ukrainian developers are listed among the best tech experts in the world. Recently, Ukrainian programmers were ranked 4th on the list of the best software engineers in Europe.
Ukrainian software developers are skilled in a variety of technologies:
Java — 17.8%; C# — 14%;
JavaScript — 17.7%; PHP — 12%;
Python — 10.9%
IT Industry in Ukraine Grew by 31.4% in 2019
In the last five years, the tech industry in Ukraine has been growing at a fast pace. Beginning with 2016, the IT service export growth rate has been increasing each year — 17.8% in 2016, 24% in 2017, 29.3% in 2018, and 31.4% in 2019.
Between 2018 and 2020, about 50 largest Ukrainian tech companies have grown by one-third in size which in numbers growing from 43K to 58K employees. In 2020, two companies have crossed the 8K specialists threshold.
The tech industry grows both quantitatively and qualitatively and, consequently, gets listed in prestigious ratings:
- Outsourcing Journal names Ukraine the 1st outsourcing market in Eastern Europe
- GSA put Ukraine on the top of the list with offshoring destinations of 2017
- CEEOA indicates that Ukraine takes the 1st place among CEE countries by outsourcing volume
- Gartner lists Ukraine among the top 20 offshore locations in EMEA
- A.T. Kearney includes Ukraine among the top 50 countries by the volume of outsourcing activities
- PwC lists Ukraine among top 25 IT service exporters
Ukraine has the second-biggest tech talent market in the CEE region with about 185K tech specialists registered in 2019 and expected 200K specialists in the tech industry by the end of 2020.
According to LinkedIn-based research, there are about 9K developers specializing in PHP in Ukraine. JavaScript and Java communities in Ukraine have 8K users each.
About 3K LinkedIn users indicated Python as their major language of coding while Ruby is used by 1K specialists. Each year, the tech industry in Ukraine gains 35K more entry-level engineers and keeps the middle and senior-level specialists on the same level.
The biggest online platform in Ukraine DOU informs that in 2019 the local tech market sees more engineers switching to JavaScript, C, C++, Python, TypeScript, Kotlin, and Go.
4. Outsourcing Rates in Ukraine Are a Happy Medium Between Asia and Latin America
Ukraine is a great outsourcing destination in terms of quality, cost, location, and cultural proximity. An average outsourcing rate in Ukraine ranges between $25 and $50 per hour which is a happy medium if to contrast with the rates in Asia and Latin America. Check the chart below.
The close geographic proximity of the South American region to North American countries stimulates tech companies to charge higher rates. As a result, the average developer rates in South American countries range between 30$ and $50 per hour.
Feed your curiosity with related articles:
- The Only Offshore Developer Rates Guide You’ll Need to Choose Your Offshore Software Development Country
- Software Developer Salaries Around the World 2020 | Which Is the Highest-Paying Country?
5. Average Developer Salary in Ukraine Is Around $2K
The average salary for developers in Ukraine begins with $4K a month which adds up to $48K a year. A mid-level developer earns around $2K a month that accumulates to a $30K yearly salary. A junior software engineer gets a salary of $1.5K a month which results in $18K per year.
*Please bear in mind that the salaries in the table have advisory character and can vary depending on the market fluctuations, vendor, and other external factors.
The average salary for a software engineer in Ukraine is defined by the seniority level, demand for the technical skills, level of responsibility, and business model the vendor applies.
Seniority Level
Just like in the US and the UK, the Ukrainian tech talent market faced rapid growth in 2013 which ignited an even higher demand for tech talents. The rapid change resulted in a devaluation of seniority level. As of now, a junior software engineer is a specialist with one or two years of experience. A mid-level specialist has two to four years of experience, while a senior developer has four and above.
Demand for Tech Skills
The major trend on the Ukrainian talent market is as follows: when technology drops in popularity on the global market, the developers are being offered slightly lower salaries. For instance, being proficient in JavaScript and Python would mean a larger salary than Java.
Level of Responsibility
The rule of thumb here is the more responsibility, the higher the salary. Within a team, a developer can fall under the categories of junior, middle, senior, team lead, and architect.
6. Two-Hour Time Difference With the EU and Seven-Ten With the US
Ukraine and the US have more common working hours than the US with the Philippines, Vietnam, or India. With only a seven-hour difference, the American companies outsourcing to Ukraine can expect regular communication during the working hours.
Ukraine is only one hour ahead of the majority of European countries which means a fully matching working day on both sides.
7. Ukrainian Developers Use Western Ratio-Based Cooperation Principle
Ukrainian software engineers take ownership for meaningful parts of a product and use critical thinking. Just like most Western European cultures, the Ukrainian way of doing business can be described as data-driven.
When we compare business ethics in Eastern cultures and Ukraine, we can see that the Eastern businesses will pay special attention to status as the most significant aspect in any cooperation, while according to Ukrainian business ethics, the decision-making process should be concentrated around facts and analytics.
Read More on the Topic:
- 12 Reasons to Hire Ukrainian Developers for IT Outsourcing
- How to Hire Top Developers in Ukraine with Daxx and Benefit from Long-Term Cooperation with Ukrainian Programmers?
8. You Can Use Different Cooperation Business Models with Vendor
Speaking about the methods of providing software development services for foreign companies, we should mention the two most frequently used business models — IT outsourcing and IT outstaffing.
Within the IT outsourcing model, a vendor takes all responsibility for delivering a market-ready product, staffing the project with the human resources they already have. The client doesn’t need to have any tech expertise within the company.
Things work differently within the IT outstaffing model as the vendor’s role is to help the client hire developers who would be an augmentation of the core client’s tech team. Hence, talent management is conducted on the client’s side.
Cost Structure Comparison: IT Outsourcing vs. IT Outstaffing
The two major business models — IT outsourcing and IT outstaffing, have different cost structures and provide different value to the client.
Within the IT outsourcing model, a vendor charges hourly rates that can include hidden costs for support staff and administrative expenses.
IT outstaffing is different in that the hidden costs are reduced to zero and a client only pays a vendor’s fee and their developer’s salaries.
9. You Can Outsource to Ukraine Regardless of Your Location
Depending on the distance between you and your outsourcing vendor, your type of IT outsourcing can be called offshoring, nearshoring, or offshoring.
Offshoring — Outsourcing Far Away
In business practice, offshoring means having software development functions operated in a country located a long-distance away. A good example of offshoring is when an American company outsources software development to a Ukrainian vendor.
Nearshoring — Outsourcing to a Neighbouring Country
Nearshoring is a type of IT outsourcing in which a client delegates IT functions to a vendor based in a neighboring country. For instance, when a company from Denmark hires a tech vendor from Ukraine, it’s called nearshoring.
Onshoring — Outsourcing Within Country
Onshoring is a business strategy used to either fill in the expertise gap or reduce the cost of development by hiring a tech company located within the borders of the same country.
The most commonly outsourced IT functions are:
- Software and application development
- Web development
- Website/application maintenance or management
- Hosting
- Technical support
- Database development and management
- Telecommunications
- Infrastructure
10. Daxx Can Help You Find Necessary Tech Talent in Ukraine
20 Years of Experience and 300+ Clients Served
Daxx is a Netherlands-based company with 400+ specialists on board. In 20 years, we’ve helped more than 300 clients from the Netherlands, the US, the UK, Norway, Belgium, Austria, Germany, and Israel hire software developers in Ukraine.
At Daxx, we use the IT outstaffing model of cooperation to grow remote tech teams with high-quality software developers from Ukraine. Regardless of the number of developers our clients require, we can help find the best-fitting talents.
High-Quality Talent Retention Process
The IT outstaffing model that we use allows our clients to work with high-quality talents and manage them directly. Besides finding and housing the tech talents we hire for our clients, we also include each developer in the retention process to ensure that the tech specialists enjoy working in their teams.
Our retention process includes an efficient onboarding process, knowledge sharing events, initiation of regular performance reviews, and being part of an engaging tech community.
Daxx Takes Care of Paperwork
Daxx’s admin staff takes care of the legal and administrative sides of collaboration so that the clients could concentrate on managing developers and improving their businesses.
For our clients, this means that Daxx does the payroll, pays taxes, provides fully-equipped work stations, and places developers in comfortable offices in Ukraine.
International Quality and Security Certifications
Back in 2009, Daxx got qualified for Microsoft Gold Certification and keeps this high standard of services up till now.
In 2019, Daxx obtained security expertise certificates ISO 9001:2015 and ISO 27001:2013.
Daxx was listed among the 50 biggest companies in Ukraine and was named third best IT employer in 2013.
